Redeemable Preferred Stock

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Redeemable Preferred Stock

Redeemable Preferred Stock

In December 2012, the Company and the ViSalus founders and the other noncontrolling members reached an agreement and

exchanged their remaining ViSalus membership interests for a total of 8,955,730 shares of Series A and Series B Redeemable

Preferred Stock of ViSalus Inc. (“Preferred Stock”), which will become redeemable on December 31, 2017 for a total

redemption price of $143.2 million (See Note 2). The shares are redeemable for cash on December 31, 2017 at a price per

share equal to $15.99 unless prior thereto ViSalus shall have effected a “Qualified IPO” or the holders, at their option, elect to

convert their Preferred Stock into common shares of ViSalus. The Preferred Stock is convertible into Class A and Class B

common stock of ViSalus on a one for one basis. Preferred Stockholders have the same rights to earnings, dividends and voting

as their common stock equivalents. ViSalus intends to pay quarterly dividends to its preferred and common stockholders (on an

as-converted common stock basis) in an amount equal to its excess cash reserves, if any. In the event of a voluntary or

involuntary liquidation or dissolution, the holders of the Preferred Stock are entitled to be paid out of the assets of ViSalus prior

to making any payment to common stock holders. The balance as of March 31, 2014 represents the fair value plus an accretion

adjustment to arrive at its redemption value at December 31, 2017. For the three months endedMarch 31, 2014, the Company recorded an earnings per share charge of $0.5 million or $0.03 per share representing the accretion adjustment to its redemption value after allocating attributable losses to preferred stockholders in excess of earnings.